3,000 S5 S3 $3 $1 $1 Question - 3 30 Marks Jetway company has two departments Dept. M and Dept. N. Dept M sells goods to N. Dept. completes the product and sell the finished product to the external customer for $70 per unit. Further information is as follows: Dept. M Dept-N Number of units transferred sold 3,000 Material Cost per unit Labour Cost $2 Other Variable costs per unit Annual Fixed costs $40,000 $30,000 Required: i) Calculate Transfer Price based on Marginal Cost + 20% ii) Calculate the budgeted annual profit for division M and N and for Company as a whole under Marginal Cost + 20% iii) Calculate Transfer Price based on Full Cost + 33% iv) Calculate the budgeted annual profit for division M and N and for Company as a whole under Full Cost + 33% v) Evaluate both divisional profits from the prospective of marginal and full cost transfer pricing and company vi) Discuss how the firm can achieve goal congruence using transfer pricing